✨ Drones, AI, and the future of tech ✨

While much of the oxygen in Big Tech rooms is being used to talk about the future of AI, another important tech has come to the forefront of a literal arms race: drones. 

The stakes could not be higher. The Russia-Ukraine war has elevated the humble quadcopter-style drone to a crucial weapon for fighting modern wars. Strategies for defeating swarms of Chinese drones are the subject of war games run by military commanders in the US and Taiwan. Recent tests of how American forces could both use low-cost portable drones in warfare and defend against them did not bode well.

All of this is why the Trump administration wants to “unleash American drone dominance,” but that might be harder than making iPhones in America. 

If you look at a drone sitting next to an iPhone, they may seem like they don’t have much in common. But under the hood, the two devices are close relatives with common technological DNA. Our Venn diagram shows how many components the two items share.

No matter how many carbon-fiber drone frames and propeller blades you make in the US, an American drone will still need to get many of its key components from abroad. China dominates the supply chain for most drone components, making local sourcing extremely difficult.

That said, several US drone makers are stepping up to challenge Chinese industry leader DJI, which has commanded the space for a decade:

• Privately held California-based Skydio exited the consumer drone market in 2023 to focus on the enterprise, government, and military market. Skydio sent hundreds of its drones to help Ukrainian troops fend off Russia’s invasion, but it didn’t go well, as they didn’t hold up in real-world battle conditions. The company was also sanctioned by China last year for selling drones to Taiwan, which affected the company’s lithium-ion battery supply chain.

• Unusual Machines is a Florida-based manufacturer of crucial drone components — including brushless motors, cameras, and flight controllers — that comply with US regulations, allowing use by government agencies. The company raised $5 million in an IPO in February and is now expanding into a 17,000-square-foot drone motor factory in Orlando.

The Takeaway

The race to build an American drone supply chain is part of a larger effort to cajole companies to bring manufacturing lines back to the US. Last week saw the effect of the Trump administration’s pressure on one of the largest companies in the world when Apple CEO Tim Cook visited President Trump, bringing a gold and glass trophy to celebrate an additional $100 billion in Apple’s US manufacturing investment.

But it will take more than a shiny bauble for a company to truly compete with DJI and attain the components and skills needed for America to catch up to China’s drone industry.

Read more.

• How much money do social media companies make from you? 
  
  With all the focus on AI and how investors are hoping it will supercharge sales and ads on social platforms, it’s easy to forget that tech companies still rely on real-life human customers using their products and services to make money. While Pinterest, Snap, and Reddit take in somewhere between $2.40 to $2.80 a month per user, our estimates put your worth to Meta as many multiples higher.
   

• The viewbots have come for Twitch
  
  Over the past few months, Twitch has shown multiple signs of a rise in “viewbotting.” These fake views push the streams up in the platform’s recommendation service and, if they’re already popular enough to have a Partner account, generate real money. Read more about the controversy.

Big Tech’s big AI love affair — in quotes 

Companies like Amazon, Meta, Microsoft, and Alphabet spent not only a record of nearly $90 billion on capex last quarter but also a good amount of time in the latest earnings season lauding AI, demonstrating how they were “leading at the frontier of AI,” and explaining how the tech was “unlocking greater efficiency.” We gathered some of the AI-lights here.

Guess which CEO mentioned AI 86 times.